Senate Democrats unveil $3.5 Trillion Corporate Welfare budget and 1 Bitcoin is now above $46,000USD – August 9, 2021,
As many people by now should know, most of the PHYSICAL U.S fiat money in circulation could not cover the cost of running the U.S government. Propped asset values are NOT liquid, just because Tesla, Amazon, Twitter, Google, etc. have stock market valuations in the billions doesn’t mean that they could cash out at that amount today, compounding the problem is the reality that most of the worlds rich that the Democrats want to tax aren’t as rich as reported, meaning that even if the Democrats confiscated the wealth of everyone they still could pay for their proposed spending.
So, with that stated, it’s understandable to me why the USD price of Bitcoin is skyrocketing. However, this, unfortunately, shows that Bitcoin is not tied to any fundamentals as the assumption appears to be in the cryptomarkets that the economy is INFLATING when the evidence suggests the economy is headed for economic deflation.
Welfare is not productive, it’s welfare, it’s a tax, its deflation, it’s consuming fiat money the Federal Reserve must add to its balance sheet in the form of an asset that must then be inflated. If an asset price is inflated, the price of labour is then priced DOWNWARD. If the cost of labour catches up with the inflation rate, this is also inflationary or consumer prices which is also deflationary for the economy as it will cost more money to purchase fewer goods and services.
Now, when there is no cost for labour, meaning the government rewards people with free money for doing nothing, sure, this is wonderful for Bitcoin, because it is inflationary as this signals there will be more money chasing fewer goods, but when money has a relationship with labour, this has economic deflation written all over it.
With that said, this does not mean that this is a sucker’s rally for Bitcoin, it just means, you should understand that if you’re getting in bed with Bitcoin, you’re playing in the casino because labour clearly can not be priced in Bitcoin as Bitcoin is clearly a derivative of fiat money.
Senate Dems unveil $3.5T budget for social, climate efforts | abcnews
At the very east fiat money gives the illusion of being tied to something tangible, Bitcoin is proving itself to be purely speculative driven, which again is okay if you can handle the risk. Since Donald Trump indulged in vote-buying, there has been this illusion buy the markets, that there will be no penalty for this?
One of the reasons I’m often writing about economic deflation leading to price inflation is so people can understand in plain language that INFLATION is a myth. This is something Milton Friedman talked about. The Government creates inflation by hiding DEFLATION. When the economy is deflating instead of shrinking government, the central banks and/or the financial wizards will concocted financial wizardry to create the WEALTH EFFECT
Bitcoin and anyone getting involved in Bitcoin in these later stages is a manifestation of the Wealth Effect, this idea that people aren’t getting poorer with free money being sent out is misleading. Capitalism is about raising the standard of living for humanity, but in order to do this in a capitalist society, OLD IDEAS HAVE TO DIE!
Socialism is an old idea, that’s failed over and over and over again and it fails because central planners aren’t that smart. Humans love freedom, Bitcoin has a right to exist, anything any people deem as money has a right to exist, but malinvestment by individuals and entities is just that and this impoverishes humanity if they’re forced to support a system that consumes more than it produces.
Nobody can’t tell me how to invest my money, so I won’t tell you, all I will say is do yourself a favor and look at the Bitcoin fundamentals before investing. All signs point to economic deflation, I don’t think the jobs reports are good for America, because it’s costing Americans a lot more to live this year than it did last year.
All of this looks like temporary euphoria to me!
Interesting times ahead